First quarter GDP growth exceeds expectations, but the economy is still 2.7% smaller

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Stats SA released first quarter GDP results on Tuesday.
Stats SA released first quarter GDP results on Tuesday.
  • The SA economy expanded by 4.6% on a quarter-on-quarter seasonally adjusted basis.
  • The finance, mining and trade industries helped bolster growth, while agriculture and the electricity, gas and water industries were the only two which contracted.
  • The economy is still 2.7% smaller than it was a year ago.


South Africa's first quarter GDP grew by 4.6% on a quarter-on-quarter seasonally adjusted annualised basis, according to data released by Stats SA on Tuesday.

Economists had been more conservative in their projections, expecting quarter-on-quarter annualised growth to come in at 3.1%.

On a non-annualised basis, growth was 1.1%. Year-on-year, the economy contracted 3.2%.

"Despite this being the third consecutive quarter of positive growth, the South African economy is 2.7% smaller than it was in the first quarter of 2020," Stats SA said.

The finance, mining and trade industries were the main drivers of output and household spending and changes in inventories helped boost demand-side growth.  


Economists expected mining to be the hero of the quarter. Stats SA showed that the mining and quarrying industry grew by 18.1%. Increases in production was reported for platinum group metals, iron ore and gold, Stats SA noted.

The finance, real estate and business services increased 7.4% during the quarter and made the largest contribution to GDP growth. Increased economic activity was reported for the transport and trade sectors, which grew 4.8% and 6.2% respectively. Overall the tertiary sector grew by 4.6%.

Results for the manufacturing industry was mixed, with only five out of ten divisions reporting positive growth rates, overall the industry expanded by 1.6% during the quarter. The secondary sector expanded by a mere 1%.

Only two out of ten industries shrank during the quarter - agriculture, which contracted 3.2%, and the electricity, gas and water sector, which contracted 2.6%.

For agriculture specifically, there were declines in production of animal products and field crops. Overall the primary sector recorded the highest growth of 11.9%, helped by mining.

On the expenditure front, household final consumption and government spend grew 4.7% and 1% respectively.

Imports also increased 26.5%, linked to increases in mineral products, machinery and equipment, vehicles and transport equipment.

Exports declined 0.9%, largely due to decreased trade in mineral products and vehicles and transport equipment, Stats SA said.

Gross fixed capital formation decreased 2.6%.

The SA economy is 2.7% smaller than it was a year
The SA economy is 2.7% smaller than it was a year ago. Graphic: Stats SA.


The economy contracted by 7% in 2020, mainly due to the impact of the Covid-19 pandemic and related lockdowns that happened worldwide. Economists, however, expect the economy to bounce back, with growth north of 3%. 

The South Africa Reserve Bank recently revised its growth outlook from 3.8% to 4.2% this year.

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